Left Unchanged
for the 11th Consecutive Time at the Sept. 25, 2018 MPC Meeting

External
Reserves

$43.92bn

As atOctober4,
2018. A c.0.11% decrease from $43.97bnon October3, 2018

Brent Crude

$84.67pb

As at October 5,
2018. A c.1.36% decreasefrom$85.84pbon
October 4, 2018

Bonds

The
bullish sentiments in the bond market persisted in today’s session, with yields
moderating further by c.6bps following some break in support on the 2027 and
2037 bond which traded as low as 14.95% on each. We also witnessed interests on
the 2022 bond, whilst there were slight retracements upward on the 2020 bond.

As
sentiments around an expected Q4 Eurobond Launch ($2.8bn/N850bn) continues to
filter into the market, we expect the market to remain slightly bullish in the
near term. We are however cautious in anticipation of the Q4 FGN Bond Calendar,
which we still expect to be relatively higher, in tune with the deficit levels
for the 2018 budget (N1.95trn).

Benchmark FGN
Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

13.77

13.44

0.12

14.50 15-Jul-21

14.74

14.02

(0.14)

16.39 27-Jan-22

14.03

13.60

(0.38)

14.20 14-Mar-24

14.95

14.77

(0.01)

12.50 22-Jan-26

14.80

14.65

0.00

16.29 17-Mar-27

15.06

14.94

(0.03)

13.98 23-Feb-28

15.10

15.03

(0.04)

12.15 18-Jul-34

15.17

15.08

0.00

12.40 18-Mar-36

15.09

15.01

(0.11)

16.2499 18-Apr-37

15.02

14.81

(0.03)

Source: Zedcrest Dealing Desk

Treasury Bills

Yields in the T-bills market
trended slightly higher by c.15bps amid a relatively tigher level of system
liqudity which came on the back of the significant OMO sale in the previous
sesssion.

Opening next week, we expect
yields to remain elevated due to expectations for further debits for a
wholesale SMIS acution by the CBN on Monday.

Benchmark FGN Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

1-Nov-18

13.00

12.75

0.25

6-Dec-18

13.00

12.75

0.25

3-Jan-19

12.75

12.30

0.00

14-Feb-19

12.90

12.50

0.15

14-Mar-19

12.70

12.25

0.00

4-Apr-19

12.50

12.20

0.00

18-Jul-19

13.00

12.45

0.00

1-Aug-19

13.00

12.50

0.00

12-Sep-19

13.25

12.75

0.00

Source: Zedcrest Dealing
Desk

Money
Market

The OBB and
OVN rates shot significantly higher by c.10pct to 20.86% and 22.50%
respectively, following a significant squeeze in system liquidity from the OMO
auctions in the previous session. System liquidity published by the CBN opening
today, fell below analysts expectation at c.76bn, consequently driving the
funding rates significantly higher.

We expect
rates to remain elevated due to expected outflows for a wholesale SMIS by the
CBN on Monday, which is likely to wipe off the existing system liquidity from
its current positive levels.

Money Market Rates

Current (%)

Previous (%)

Open
Buy Back (OBB)

20.86

11.67

Overnight
(O/N)

22.50

12.58

Source: FMDQ, Zedcrest Research

FX Market

At the Interbank, the Naira/USD rate remained
stable N360.40/$ (spot) and N361.34/$ (SMIS). At the I&E FX window a total
of $62.54mn was traded in 258 deals, with rates ranging between N345.00/$ -
N365.00/$. The NAFEX closing rate depreciated by c.0.07% to N363.82/$ from
N363.57/$ previously.

At the parallel market, the cash rate remained
stable at N359.50/$, while the transfer rate appreciated by 20k to N362.80/$.

FX Market

Current (N/$)

Previous ( N/$)

CBN
Spot

306.40

306.40

CBN
SMIS

361.34

361.34

I&E
FX Window

363.82

363.57

Cash
Market

359.50

359.50

Transfer
Market

362.80

363.00

Source: CBN, FMDQ, REXEL BDC

Eurobonds

The NGERIA sovereigns remained bearish in
today’s session, with yields trending higher by c.5bps on average, amid a
continued rise in US treasuries following a better than expected unemployment
report. The most losses were still on the 30-yr which lost c.0.90pct on the
day.

The NGERIA Corps were mostly quiet, except
for slight interests witnessed on the ACCESS 21s Snr and Subs, which gained
about 0.15pct and 0.25pct on the day respectively.